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Information Guide - Nebraska

personal property Assessment Information Guide , August 2, 2021, Page 1 OverviewAll depreciable tangible personal property , used in a trade or business, with a life of more than one year is subject to net book personal property tax in Nebraska . personal property must be reported annually to the county assessor and is based on the depreciated life of an asset. This Guide will help property owners understand the assessment process for personal guidance document is advisory in nature but is binding on the Nebraska Department of Revenue (Department) until amended. A guidance document does not include internal procedural documents that only affect the internal operations of the Department and does not impose additional requirements or penalties on regulated parties or include confidential Information or rules and regulations made in accordance with the Administrative Procedure Act.

Directive 11-5. Taxable Personal Property All depreciable tangible personal property is subject to personal property tax in Nebraska. Depreciable property is property for which federal depreciation is allowed. Whether or not the property owner actually takes federal depreciation has no bearing on its taxability for personal property taxation.

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Transcription of Information Guide - Nebraska

1 personal property Assessment Information Guide , August 2, 2021, Page 1 OverviewAll depreciable tangible personal property , used in a trade or business, with a life of more than one year is subject to net book personal property tax in Nebraska . personal property must be reported annually to the county assessor and is based on the depreciated life of an asset. This Guide will help property owners understand the assessment process for personal guidance document is advisory in nature but is binding on the Nebraska Department of Revenue (Department) until amended. A guidance document does not include internal procedural documents that only affect the internal operations of the Department and does not impose additional requirements or penalties on regulated parties or include confidential Information or rules and regulations made in accordance with the Administrative Procedure Act.

2 If you believe that this guidance document imposes additional requirements or penalties on regulated parties, you may request a review of the guidance document may change with updated Information or added examples. The Department recommends you do not print this document. Instead, sign up for the subscription service at to get updates on your topics of Tangible personal property . Depreciable tangible personal property is personal property used in a trade or business or used for the production of income, and which has a determinable life of longer than one year. Intangible property . Intangible personal property is all property that has no intrinsic value by itself, but is representative or evidence of value, such as stocks, bonds, promissory notes, contract rights, bank accounts, money, and other such Adjusted Basis.

3 The Nebraska adjusted basis is the adjusted basis for federal income tax purposes, increased by the amount of depreciation, amortization, or deduction under Section 179 of the Internal Revenue Code, taken on the personal property . Generally, the adjusted basis is the original cost of the item, including sales tax, freight, installation, testing charges, and other fees or taxes associated with the acquisition of the property . Nebraska Adjusted Basis for Trade Ins. For purchases of depreciable personal property occurring on or after January 1, 2018, if similar personal property is traded in as part of the payment for the newly acquired property , the Nebraska adjusted basis is the remaining federal tax basis of the property traded-in, plus the additional cash (boot) paid by the taxpayer for the newly acquired Depreciation Factor.

4 The Nebraska depreciation factor is the percentage of the adjusted basis that is taxable in Nebraska for each recovery period and Rev. 8-2021 Supersedes 96-279-2014 Rev. 9-2020 personal property AssessmentInformation GuideAugust 2021 personal property Assessment Information Guide , August 2, 2021, Page 2 Nebraska Net Book Value. Nebraska net book value is the taxable value for personal property taxation. It is the Nebraska adjusted basis of the tangible personal property multiplied by the appropriate depreciation factor, based on the year placed in service and the recovery period. personal property . personal property is all property other than real property and franchises.

5 Recovery Period. The recovery period is the federal Modified Accelerated Cost Recovery System (MACRS) recovery period over which the Nebraska adjusted basis of property will be depreciated for property tax purposes. Tangible personal property . Tangible personal property is personal property possessing a physical existence, excluding money. Tangible personal property also includes trade fixtures, such as machinery and equipment, regardless of the degree of attachment to real property , used directly in commercial, manufacturing, or processing activities conducted on real Fixture. An item of machinery or equipment, used directly in commercial, manufacturing, or processing activities.

6 The degree of attachment does not determine the classification of machinery or equipment as real property . Trade fixtures are items of personal property which are placed upon or affixed to real property for the sole purpose of carrying on a trade or business. Trade fixtures do not become part of, or constitute capital improvements to real property . Trade fixtures are not real property fixtures. See directive personal PropertyAll depreciable tangible personal property is subject to personal property tax in Nebraska . Depreciable property is property for which federal depreciation is allowed. Whether or not the property owner actually takes federal depreciation has no bearing on its taxability for personal property taxation.

7 Exempt Tangible personal property v Motor vehicles, trailers, and semitrailers required to be registered for operation on the highways of this state. v Livestock. v Household goods or personal effects not owned for financial gain or profit. v Business inventory. v personal property owned for purposes of leasing or renting is considered business inventory, if leased or rented for 30 days or less, can be returned at any time by the lessee or renter, and if owned by an individual the property would be deemed household goods and personal effects. v personal property that has qualified and been approved by the Tax Commissioner for an exemption pursuant to the Employment and Investment Growth Act or the Nebraska Advantage Act.

8 V personal property owned by the state or local governmental subdivisions that is being used or developed for a public purpose. v personal property of any educational, religious, charitable, and cemetery organization or any personal property of an organization created for the exclusive benefit of an educational, religious, charitable, or cemetery organization, being used predominantly for educational, religious, charitable, or cemetery purposes, and which has been granted an exemption by the county board of equalization. v personal property owned by a Native American Indian and having situs on a Nebraska Indian reservation. v Tangible personal property used directly in the generation of electricity using wind as the fuel source is exempt from property tax and subject to the nameplate capacity tax.

9 personal property Assessment Information Guide , August 2, 2021, Page 3 v Tangible personal property used directly in the generation of electricity using solar, biomass, or landfill gas is exempt from property tax if the depreciable tangible personal property was installed on or after January 1, 2016, and has a nameplate capacity of 100 kilowatts or more, but is subject to the nameplate capacity tax. v Tangible personal property acquired by a person operating a data center located in Nebraska , which is then incorporated into other tangible personal property for subsequent use outside the state by the same person operating a data center in this state.

10 V Livestock and exemptions granted under the Beginning Farmer Act, Neb. Rev. Stat. DateAll taxable tangible personal property located in Nebraska must be valued as of January 1, 12:01 , of each year. The personal property must be owned as of that date to be subject to taxation for the current assessment of personal property personal property should be listed at the location of the business, unless the property has acquired local situs elsewhere. An item of personal property is deemed to have acquired local situs elsewhere if it is kept in a location, other than the location of the business, for the greater portion of the calendar year.


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